As the economy rebounds and the talent war heats up, more and more employees have a message for their employers: Give me better pay and better benefits or I’m leaving.
That’s the main finding of research from Spherion Staffing, who surveyed 416 U.S. human resource managers and 2,810 U.S. working adults.
The news has big implications for HR and benefits managers, who largely haven’t budged on increasing pay or perks for employees over the last several years, despite continued evidence of recruiting and retention difficulties. In fact, a new report out this week from WorldatWork shows that salary increases have stalled at 3% for the third year in a row.
“Companies will soon begin to feel — if they haven’t already — pressure to increase compensation at the risk of losing top workers,” says Sandy Mazur, Spherion division president.
“The economy and the job market currently favor the worker for the first time in a long time, and workers see an opportunity to recapture the money and benefits that may have eluded them during the recession,” she continues. “This major shift in mentality will force HR and benefits professionals to reevaluate what they offer employees and determine how to leverage this perspective to improve retention and recruitment.”
According to Spherion, 26% of workers are at least “somewhat likely” to look for a new job in the next 12 months (up from 18% last year). And more than half (51%) feel the expanding job market gives them more power to negotiate a higher salary either with their current company or with another.
“During the recession, many employees felt pressure to accept any opportunity they could get,” Mazur says. “Now, these same employees feel they should be rewarded for their years of loyalty and hard work.”
This outlook has implications for retention strategies as well as companies’ overall salary approach, Spherion says. In fact, employees list financial compensation and benefits as the top two factors influencing their potential retention. Growth and earnings potential, time and flexibility, culture and work environment round out the top five reasons employees stay at their current jobs.
See also: The top 8 ways to retain your employees
Numerous reports have stated that employers are facing more pressure than ever before to recruit and retain high-quality workers. Spherion, for one, finds that a whopping 78% of businesses say they are more worried about a talent shortage today than they were one year ago.
Mazur says, “we’ve never before seen workers this motivated to improve their situation.”
Nearly three-fourths (74%) of companies say they have increased wages to remain competitive, while a nearly equal number (73%) say they have seen their competitors raise salaries. Yet 62% of employers who recognize the need to pay higher wages say they cannot afford to do so.
That may mean that employers will become more creative with strategies to retain and attract workers.
For example, more than half (52%) of companies say they offer their employees periodic bonuses, often in lieu of a fixed annual increase. Others may offer gift cards or similar rewards as a token of appreciation. Beyond financial compensation, benefits and earnings potential, employees listed “time and flexibility” and “culture and work environment” as the next two most important factors shaping their likelihood of staying with their current company.
“Arguably, these factors are easier for companies to address and improve,” Mazur says. “Schedule
flexibility options that allow workers to balance their responsibilities against their busy out-of-office schedules — in industries where working remotely is possible — can offset potential frustration.”
Additionally, she says, “many companies offer workers paid time off for days to give back to the community, with group service projects also serving as a chance to build team camaraderie.”
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